Not every lender is receptive to processing a bad credit personal loan. For the borrower who has bad credit and needs a loan, this can be a difficult situation. It will be more complicated than calling the bank with which you always do business, but it isn't an impossible situation.

How to find a legit lender

The most logical place to search is in the local area where you live. Most people usually start with the bank where they do business, and if they are receptive to processing a bad credit personal loan, that is the most convenient step. However, that may not be the most cost-effective means of obtaining the loan. No matter how convenient it may seem to use your own bank, it might be more financially feasible to do some research first, keeping in mind that different financial institutions have different lending rates. If you have access to the Internet, do a search through one of the websites that puts you in touch with several different direct lenders so that you can review the interest rates and other criteria before narrowing it down to a few you wish you contact.

Narrowing the search

After you have a list of lenders who offer a bad credit personal loan, it's important to review the criteria of each one. At this point, you want to choose the one who is going to best meet your needs in the most cost-effective way. In order to do this, you may need to make some telephone calls or request more information if you don't have everything that you need. You are not yet ready to make any final decisions, but you want to narrow the search to a few lenders from which to choose. You may, at this stage, eliminate those who have the highest interest rates, because this will be one of the factors used to make the final decision.

Choosing a direct lender

Once you have narrowed the search to a few finalists, you may need to make some further inquiries in order to obtain enough information to determine with whom you want to do business. Such things as interest rate, repayment term, loan costs, and the willingness of the lender to provide the funds you need must be considered. It's also important to look at the potential for a continuing relationship with the lender since rebuilding your credit is more likely to happen with the cooperation of an understanding lender.

How to make the relationship work

Once you have established a relationship with a lender, it's up to you, the borrower, to make everything work. As someone looking to rebuild credit, the easiest way to do this is to make certain you make your payments on time. Since the lender already knows your past credit history, he will be following you with more scrutiny than other customers. It is up to you to prove to him that you are credit worthy. You must rebuild the trust of the lenders, so be certain you can handle the loan payments before you sign the contract.